Ludwigshafen, Germany
March 14, 2002

- Important measures implemented in a difficult environment in 2001
- All segments in the black before special items
- Strategy and financial strength prepare BASF for 2002's opportunities

BASF performed well in an unprecedented year 2001 and is confidently taking on the challenges of a difficult year in 2002.

All of BASF's segments posted positive income from operations before special items in 2001 - despite high raw material prices and despite the recession. Income from operations on the basis of ongoing business before special items was EURO 2.3 billion, underlining the strength of BASF's business operations. In 2001, sales from ongoing business increased by over 3 percent to almost EURO 32 billion.

BASF shares outperformed Germany's DAX and the EURO STOXXSM indices. The company is continuing to pursue its shareholder friendly dividend policy and will propose to the Annual Meeting a dividend of EURO 1.30 per share. BASF's dividend will therefore remain at the same level as in 2000.

"The current forecasts as to when the recovery will begin vary greatly. Early indicators increasingly give grounds for guarded optimism. However, in the first months of 2002, we have not yet seen signs of a strong recovery in our order books," explained Dr. Jurgen F. Strube, Chairman of BASF's Board of Executive Directors today (March 14, 2002) in Ludwigshafen and added: "I am nonetheless confident: If the positive signals being sent by the indicators prove to be correct, then we will be among the first
companies to benefit from the economic recovery. BASF has the right market position and a strong product portfolio."

Higher earnings sought in 2002

BASF's stated goal is and remains to increase its corporate value through growth and innovation. "In 2002, our goal is to generate significantly higher earnings than in the previous year from roughly the same level of sales from ongoing business," said Strube.

Strube is cautiously optimistic with regard to 2002: "Our measures for restructuring and improving efficiency form the basis for the increase in income from operations that we are striving to achieve in 2002. A recovery in the economy will also assist us in reaching this goal." Nevertheless, 2002 would still be a difficult year said Strube: "We hope that demand for products from the chemical industry will increase in the second half of the year. And we will use the time until the upturn to further improve our
efficiency."

Timely cost reduction programs show success

Last year, BASF was quick to take measures to adjust its activities to the slowing economy. A series of coordinated programs and initiatives resulted in special charges of EURO 747 million, which included costs for site and plant closures. As a results, earnings in 2001 are burdened by special items of over EURO 1 billion. However, these measures, together with synergies in the Agricultural Products division and the streamlining of the company's global organization, are expected to reduce costs by EURO 1 billion by 2003. The first fruits are already visible: In 2001, BASF achieved cost savings of about EURO 250 million. In the current year, the company aims to achieve two-thirds of the targeted amount.

Special charges were offset by extraordinary income of over EURO 6 billion from the sale of our pharmaceuticals business. As a result of this high special income, income before taxes and minority interests was EURO 6.7 billion - EURO 3.9 billion more than in 2000.

Income from operations before special items positive in all segments

BASF's long-term strategy paid off under difficult conditions, especially in the second half of the year. The company is now well positioned as a result of expanding of its profitable oil and gas business, strengthening its agricultural products business, and focusing on cost leadership in its chemicals activities.

Despite the severe economic downturn, sales in the Chemicals segment remained at the previous year's level. Earnings were reduced due to high raw material costs and a decline in demand in key customer sectors as a result of the economic slowdown. Start-up costs were associated with major new production facilities, in particular at BASF's sites in Kuantan, Malaysia, and Port Arthur, Texas. Income from operations before special items in the Chemicals segment therefore fell by about one-third.

In the Plastics & Fibers segment, decreasing demand coupled with low selling prices reduced sales and earnings. Fibers, fiber intermediates and styrenics were particularly hard hit. The performance of our polyurethanes business was better. Despite the difficult market situation, income from operations before special items in the Plastics & Fibers segment was positive in 2001.

Sales from ongoing business in the Performance Products segment were slightly above the previous year's level. The economic slowdown in the major markets in North America and in Europe, however, led to a decline in income from operations before special items of about one-third compared with the previous year.

The Agricultural Products & Nutrition segment developed positively in a challenging environment. The Fine Chemicals division performed successfully and increased income from operations before special items. The Agricultural Products division also remains on course. In the current season, BASF received registration for crop protection products with its innovative active ingredient F 500(TM) in important markets such as Germany and Great Britain. The Agricultural Products & Nutrition segment
increased income from operations before special items by EURO 330 million to EURO 273 million.

In 2001, BASF's Oil & Gas segment, which has expanded noticeably in recent years, once again demonstrated its strategic importance and profitability. At a time when high crude oil prices reduce profits in our chemical activities, the company's Oil & Gas segment helps stabilize the earnings of the BASF Group as a whole. Income from operations in the segment was EURO 1.3 billion, or 3 percent more than the previous year's level. In 2001, BASF's oil and gas production was more than 12 million metric tons of oil equivalent, or 13 percent more than in the previous year.

BASF is the world's leading chemical company. It aims to increase and sustain its corporate value through growth and innovation. BASF offers its customers a range of high-performance products, including chemicals, plastics, coatings systems, dispersions, agricultural products, fine chemicals as well as crude oil and natural gas. BASF's distinctive approach to integration, known in German as "Verbund," is its strength. It enables the company to achieve cost leadership and gives it a decisive
competitive advantage in the long term. BASF acts in accordance with the principles of Sustainable Development. In 2001, BASF had sales of EURO 32.5 billion (circa $29 billion) and over 90,000 employees worldwide. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA), New York (BF), Paris (BA) and Zurich (BAS).